Yellow flag from initial jobless claims turns a little more orangey – by New Deal democrat Initial jobless claims rose 22,000 to 264,000 last week, while the 4 week average rose 6,000 to 245,250. Continuing claims, with a one week lag, rose 12,000 to 1.813 million: Note that both measures of initial claims are at their highest levels since late 2021. Continuing claims are also at those levels, although slightly down from three weeks ago. On a YoY basis, initial claims are up 25.7%, the 4 week average up 15.1%, and continuing claims up 24.4%: If these YoY comparisons persist for another month, that would be sufficient to hoist the “red flag” recession warning. So this is a good time to reiterate that weekly data can be noisy, and this
Topics:
NewDealdemocrat considers the following as important: Hot Topics, jobless claims, May 2023, New Deal Democrat, politics, US EConomics
This could be interesting, too:
NewDealdemocrat writes Retail Real Sales
Angry Bear writes Planned Tariffs, An Economy Argument with Political Implications
Joel Eissenberg writes Will DOGE be an exercise in futility?
Bill Haskell writes The spider’s web called Healthcare Insurance
Yellow flag from initial jobless claims turns a little more orangey
– by New Deal democrat
Initial jobless claims rose 22,000 to 264,000 last week, while the 4 week average rose 6,000 to 245,250. Continuing claims, with a one week lag, rose 12,000 to 1.813 million:
Note that both measures of initial claims are at their highest levels since late 2021. Continuing claims are also at those levels, although slightly down from three weeks ago.
On a YoY basis, initial claims are up 25.7%, the 4 week average up 15.1%, and continuing claims up 24.4%:
If these YoY comparisons persist for another month, that would be sufficient to hoist the “red flag” recession warning. So this is a good time to reiterate that weekly data can be noisy, and this week’s spike could be the start of a trend – or it could just be an outlier. Many times in the past there have been brief crossings of the 12.5% YoY threshold that reversed quickly and did not signal a recession.
Here’s what the historical record of YoY readings in the three metrics have looked like (all normed to 0 as of this week’s reading, 1 week’s claims averaged by month):
In 4 of the 7 recessions before the pandemic, claims did not hit this level YoY until after the recession actually started. In 2 they hit this level 6 months or less before the recession, and in 1 (1990) 9 months before. But there were also 7 false positives: August 1971, February 1977, March 1979, February 1985, October 1995-June 1996, March 2005, and February 2007. Note that only one of these lasted longer than a month.
So this week the yellow flag caution turned a little more orangey.
Jobless claims hoist yellow flag again; employment and unemployment likely to show further deceleration tomorrow, Angry Bear, New Deal democrat